The holiday season is a great time to relax, spend time with family, and enjoy the fruits of your labor. There\u2019s a lot to be grateful for this year. Despite global conflicts and elevated prices, consumers around the world are starting to believe the worst is behind us. Don\u2019t let that lull you into a sense of complacency. Now is the time to get proactive with your personal finances.<\/p>\n\n\n\n
Most consumers will feel the bite of higher prices during their holiday shopping sprees. They are already experiencing high food and fuel costs. Some are barely getting by, so gift-giving could be limited this year. If that\u2019s your story, you can drown your sorrows in eggnog, or you can take these seven proactive steps to make sure it doesn\u2019t happen again next year.<\/p>\n\n\n\n
Step #1: Review Your Budget<\/p>\n\n\n\n
Your personal budget is the blueprint for building financial success. December is the month you\u2019ll want to review it. Start from scratch. Make a list of all your expenses and your sources of income. Figure out exactly how much you spend each month and what you\u2019re bringing in to cover those expenses. Don\u2019t leave anything out, no matter how small.<\/p>\n\n\n\n
There\u2019s a second part to this that\u2019s often overlooked. Separate your budget expenses into \u201cessential\u201d and \u201cnon-essential\u201d categories. Be honest with yourself when you do this. An expensive cable TV package for someone who\u2019s on the road all the time doesn\u2019t have the same value that the same package has for a stay-at-home worker. Mark it accordingly.<\/p>\n\n\n\n
Step #2: Evaluate Your Job Situation<\/p>\n\n\n\n
We\u2019re not going to tell you to start cutting expenses just yet. Look at your job situation before you do that. If you\u2019re stuck someplace making less money than you should, cutting expenses won\u2019t solve your problem. Focus on increasing your income first. Check out the local job market. Search for online or hybrid positions. There are lots of these to choose from.<\/p>\n\n\n\n
Changing jobs is a big move. Make sure you plan carefully and put yourself in a better situation at the new job than the one that you\u2019re leaving. If you don\u2019t want to take the leap, try working part-time somewhere else to test the waters. That will give you an income boost that you can use to increase your savings before making a major job change.<\/p>\n\n\n\n
Step #3: Consolidate Your Credit Card Debt<\/p>\n\n\n\n
Interest rates on credit cards are at their highest point in years and will remain that way through most of 2024. Fixed interest rates on personal loans are high also, but they’re still lower than the variable rates you\u2019ll pay on your credit card balances. Consolidating your credit card payments into one fixed monthly loan payment should save you some money.<\/p>\n\n\n\n
Be careful when you start the consolidation process. Dozens of lenders will likely respond if you fill out an online application for a debt consolidation loan. Many will be legitimate, but some will be predatory lenders that charge high fees and interest rates. Read each loan offer carefully to make sure you\u2019ll benefit from it. Consolidation isn\u2019t worth it if you don\u2019t save money.<\/p>\n\n\n\n
Step #4: Find Ways to Cut Costs<\/p>\n\n\n\n
We told you we\u2019d get here. Now that you\u2019ve done your budget, evaluated your employment situation, and consolidated your credit card debt, it\u2019s time to go back to your monthly expenses to find ways to cut costs. We already talked about dumping that expensive cable TV package. You can use the same line of thinking for phone and internet contracts.<\/p>\n\n\n\n
Other cost-cutting moves are more subtle. How do you cut a supermarket bill down by 20% each week? Start by eliminating expensive brand names and cutting back on junk food. Buy paper goods and non-perishable items in bulk whenever possible. You\u2019ll also want to buy some lunch food you can bag up if you\u2019re commuting to work.<\/p>\n\n\n\n
Step #5: Ask About Payment Deferrals<\/p>\n\n\n\n
Creditors sometimes offer payment deferrals for customers who need relief during tough economic circumstances. A deferment means they take your next payment and move it to the end of the contract. Lenders and retailers who sell their products on credit may have deferrals built into their contracts. Reach out to any that do and take advantage this month.<\/p>\n\n\n\n
The point of this step is to lighten your financial burden in the month of December. That allows you to enter the new year in slightly better shape, not stressed out about where your next dollar is coming from. The removal of that burden provides a psychological advantage that can help you get ramped up in January. Momentum should build naturally from there.<\/p>\n\n\n\n
Step #6: Make a Commitment to Pay Cash<\/p>\n\n\n\n
This sounds simple. It\u2019s not. We live in a cashless society where everyone wants you to use a plastic card or phone app to make purchases. Either is okay if you\u2019re not being charged interest on the transaction. In this step, the term \u201cpay cash\u201d could refer to a debit card, Venmo, Cash App, or other payment option where the user preloads funds.<\/p>\n\n\n\n
Making a commitment to pay cash is promising yourself that you won\u2019t pay interest on credit cards and loans next year. If you can\u2019t afford to pay cash, don\u2019t buy it. That simple rule could keep you from having to struggle with holiday debt again next year. Try it for a week to see how it works. You\u2019ll find it gets easier the longer you do it.<\/p>\n\n\n\n
Step #7: Start a Side Hustle<\/p>\n\n\n\n
The pandemic taught us that there are more ways to make money than simply going to work every day. There are several online freelancer sites where you can pick up writing, data entry, photography, and web design jobs. If you prefer something in person, try babysitting or dog walking. These are called \u201cside hustles.\u201d You should have one.<\/p>\n","protected":false},"excerpt":{"rendered":"
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